Before you take any action regarding allowing a home loan to go into foreclosure, you must know the full implications of this decision. There are strategies you should employ to determine your best course of action and you must be prepared for any fallout from allowing a default on your home loan.
Today’s homeowners are under ever-increasing pressure to make a decision on their home loan. Taking that first step starts with weighing all of your options to see if foreclosure is the best course for your particular situation.
Consider These Important Factors
You need to evaluate some critical factors before just assuming that foreclosure is your only route. Ask yourself these questions:
- What is your current home’s worth? If you can sell the home for a profit or breakeven, then it does not make sense to allow your loan to go into default. The same is true if you have the resources to pay any differences from your sales net to your loan value. The value you receive from having a satisfied loan on your credit report outweigh the cost of paying the loan in full.
- Can you afford to maintain your loan? Carefully review your finances to see if you can afford your current mortgage with your present income. If you are continually dipping into your savings account or borrowing funds from friends and family to cover your mortgage, you might need to consider foreclosure. If you can continue paying on it without doing so, it could help you to hang onto it long enough for home values to rebound.
- What happens if I walk away from my current mortgage? Your immediate impact will be felt on your credit report. Foreclosures stay on your credit report for 7 to 10 years and can severely impact your ability to obtain credit. You need to take this into consideration as it can impact your ability to receive an automobile loan, rent an apartment, obtain a department store credit card, or even receive a job offer. You must also be aware that New Mexico law provides for a deficiency judgment. This occurs when a property is sold for less than what the loan amount is. The borrower can still be liable for the difference in amounts. There are exceptions to this rule; this is why it is strongly advised to seek the guidance of a knowledgeable real estate attorney before you commit to any action to protect yourself against liability and deficiency judgments.
We’re Here to Help!
When a homeowner is faced with the dilemma of foreclosure and they are determining the best course of action, it is vital to take your unique circumstances into consideration before making a decision. Here, at Indigo Mortgage, we are loan specialists who are highly-skilled in assisting our customers with all of their loan needs.
Our philosophy is to serve you with the highest integrity, leveraging our faith-based approach to customer service and our overall operation.We would be happy to discuss your present financial situation with you to see if we could be of assistance. There are government loan programs available to assist homeowners underwater in their current loan. Give us call at 505.836.5700 to see if we can help.